INSURANCE BRIEFS

INSURANCE BRIEFS

FDIC TO STUDY

BANK-INSURANCE LINKFederal Deposit Insurance Corp. Chairman William Seidman on Tuesday ordered the FDIC staff to study whether insurance can be sold ''directly" in banking institutions without jeopardizing the industry or the deposit insurance fund.

Mr. Seidman said at the start of an FDIC board meeting the staff will examine two alternatives - whether banks should be allowed to sell insurance at all and the effects of selling it only in a separately capitalized subsidiary.

The new Delaware law that expressly allows banks to sell insurance necessitates an FDIC examination of the issue, Mr. Seidman said.

The Delaware law "opens a whole host of issues about safety and soundness and the appropriateness about extending the federal safety net to banks engaged in new or non-traditional activities," he said.

NY COURTS TO TRY

GRACE ASBESTOS SUIT

BOSTON - The state's highest court ruled Monday that New York courts are the proper forum for a suit between W.R. Grace Co. and numerous insurance companies over asbestos claims.

The Supreme Judicial Court agreed with a lower court ruling that the case should not be heard in Massachusetts, in a 5-1 decision.

The dispute over where the case should be heard involved Grace, United Technologies Corp., Liberty Mutual Insurance Co., the company's primary insurer, and about a dozen other insurers.

Claims have been made or threatened against the company for pollution of 70 sites in more than 20 states, according to the ruling. Three sites are located in Massachusetts.

STATE FARM GETS

TRIPLE A RATING

NEW YORK - Moody's Investors Service assigned triple A insurance financial strength rating to State Farm Life Insurance Co.

The rating reflects the company's large base of traditional life insurance products, its asset quality and its superior capitalization, according to Moody's.

State Farm has developed a strong low-cost distribution network for marketing its participating life insurance products to middle-income customers and above, Moody's said.